US stocks: Dow ends higher on GM sales, US economic data

NEW YORK - US blue-chip stocks advanced on Friday, helped by evidence of stronger consumer confidence and manufacturing last month, while General Motors Corp. shares climbed after it reported a jump in sales.

Still, the Nasdaq's gains were limited by a drop in Pixar Animation Studios Inc. shares, which fell almost 14 per cent after the company cut its earnings forecast.

Wall Street got good news on consumer confidence for the second time this week, when the University of Michigan's consumer sentiment index for June exceeded analysts' forecasts -- after the Conference Board's report earlier this week that its consumer confidence index hit a three-year high. And a monthly report from the Institute for Supply Management showed US manufacturing activity grew quickly in June, easing investors' concerns about an economic slowdown.

The Dow Jones industrial average rose 28.47 points, or 0.28 per cent, to end at 10,303.44. The Standard & Poor's 500 Index added 3.11 points, or 0.26 per cent, to finish at 1,194.44. The technology-laced Nasdaq Composite Index inched up just 0.41 of a point, or 0.02 per cent, to close at 2,057.37.

"We've got good economic numbers, strength in the economy and low inflationary pressures," said Tom Schrader, head of listed equity trading at Legg Mason Wood Walker. "These numbers indicate that the consumer is handling the higher oil prices as best as they can." For the week, the Dow ended up 0.05 per cent, the S&P 500 edged up 0.24 per cent and Nasdaq crept up 0.20 per cent.

After the closing bell, shares of Boston Scientific Corp. soared 10.6 per cent to US$29.75 from a Nasdaq close at US$26.89, while Johnson & Johnson shares fell 0.6 per cent to US$64.55 on the Inet electronic brokerage network.

A federal jury in Delaware on Friday found that Johnson & Johnson infringed two of Boston Scientific's patents on drug-coated stents, Boston Scientific said.

CONSUMER, MANUFACTURING DATA HELP

The University of Michigan's June consumer sentiment index jumped to 96, beating the 94.8 forecast of economists in a Reuters poll, according to people who saw the subscription-only Michigan report. The reading for May was 86.9.

Analysts had warned that rising crude prices could dampen consumer spending, as higher petrol prices eat into discretionary budgets.

The Michigan report offered some positive reinforcement of the Conference Board's report on Tuesday that its June index of consumer confidence rose to 105.8 in June, its highest level in three years, on consumers' optimism about the labor market.

In another economic report on Friday, the Institute for Supply Management, or ISM, said its index of national factory activity climbed to 53.8 in June, well above economists' forecasts of a slight uptick. The ISM said a jump in new orders helped the manufacturing sector, which overcame the hurdle of soaring energy prices.

GM AND EXXON MOBIL LIFT THE DOW

General Motors stock shot up 1.9 per cent, or 65 cents, to US$34.65 after the world's largest automaker reported that US sales surged 41 per cent in June. General Motors credited an aggressive "Employee Discount for Everyone" incentive programme for its skyrocketing sales.

Shares of Ford Motor Co. rose 0.7 per cent, or just 7 cents, to US$10.31 after the company reported a 1 per cent increase in unadjusted monthly US auto sales. But on an adjusted basis, Ford's US sales of new cars and trucks fell for the 13th consecutive month in June.

"Autos are doing better as car sales are better," said Larry Peruzzi, senior equity trader at The Boston Co. Asset Management. "Oil prices are bouncing back and helping the energy companies."

On Friday, crude oil for August delivery settled up US$2.25 at US$58.75 a barrel, lifted by short covering before the long weekend for the US Independence Day holiday on Monday. Still, that settlement price marked a retreat from Monday, when NYMEX August crude hit a record US$60.95.

US financial and commodity futures markets will be closed on Monday for the Independence Day holiday.

Shares of Dow component Exxon Mobil Corp. rose 1.5 per cent, or 84 cents, to US$58.31, boosted by the climb in crude prices.

The American Stock Exchange index of energy companies gained 2.3 per cent.

PIXAR PLUNGES, XM SURGES

In Nasdaq trading, Pixar shares plunged 14 per cent, or US$6.99, to US$43.06 a day after the company cut its forecast on weaker-than-expected DVD sales of its hit film "The Incredibles."

But XM Satellite Radio Holdings Inc. advanced 3.5 per cent, or US$1.16, to US$34.82 after it said on Friday that subscribers increased by 640,000 in the second quarter, bringing its listeners to a total of 4.4 million..

Shares of Dow component Coca-Cola Co. rose 1.1 per cent, or 46 cents, to US$42.21 on the NYSE. The world's largest soft drink maker has spent the past year and a half remodeling to suit consumer tastes.

But blue-chip company Pfizer Inc. fell 1.7 per cent, or 48 cents, to US$27.10 after the world's largest drug company said it is dropping development of two drugs.

Trading was moderate, with 1.25 billion shares changing hands on the New York Stock Exchange, below the 1.46 billion daily average for last year. About 1.24 billion shares traded on Nasdaq, under the 1.81 billion daily average last year.

- REUTERS